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Larry Kudlow's White House Success Depends on His Political Skills

(Bloomberg View) -- It shouldn't be a problem that incoming National Economic Adviser Larry Kudlow isn't a trained economist possessing an advanced degree. It isn't even necessarily disqualifying that he's known as a famously bad pundit on financial matters. Neither shortcoming makes it impossible for him to do an excellent job leading the National Economic Council.

But another skill is absolutely central to the council's mission, and it's not clear that Kudlow has it.

In 1993, President Bill Clinton decided to put together a formal process for economic policy based on the National Security Council, which was President Harry Truman's innovation. Brad DeLong explains it concisely: "The major day-to-day job of the NEC Chair is to coordinate the presentation of economic policy options to the President, and to try to keep the agencies and departments on the same page as they implement policy."

Simply dealing with Treasury on economic policy was inadequate because State, Commerce, the Small Business Administration, the United States Trade Representative, and many other agencies influence the economy. The NEC's job is, as DeLong puts it, best seen in terms of inputs and outputs. On the inputs side, someone must make sure all relevant actors within the administration have an opportunity to voice their ideas and concerns. That requires the director to be an honest broker who will seek the best plan, not necessarily the one he or she personally backs. The outputs side consists of ensuring, after policy decisions are made, that they are carried out consistently by every part of the government.

The job is one of management and coordination, not advocacy, even if it sometimes expands with other responsibilities. No matter how preoccupied the director, the NEC remains the main mechanism for the White House to gather information from within and outside of the government about economic decisions.

The core skills that Kudlow needs are political, not economic. The NEC director needs to know how to read all the information coming in. When Treasury -- or Wall Street -- objects to a potential policy, what does that really mean? Is it a pro forma objection? Something that an agency or an interest group really cares about? Is this complaint the kind of status quo bias, perhaps by the bureaucracy, that the president expects to encounter and hopes to overcome? Or is it far more substantive, hinting at knowledge of severe real-world consequences if the president pushes ahead?

Or think of it this way: If, say, the IRS asserts it can't do something, are they saying that it would be a lot of work for them with little benefit they can see -- or are they really saying that it absolutely can't be done? Mistaking the former for the latter could kill an initiative that should go forward; a mistake the other way can produce a policy disaster.

The NEC director certainly needs to be economically literate, and Kudlow clears that bar. But advanced expertise isn't needed. Laura Tyson, Lawrence B. Lindsey and Lawrence Summers were economists; Robert Rubin, Gene Sperling, and Jeff Zients were not. What matters is whether he's going to aspire to perform as an honest broker and whether he has the political skills and government experience to do it. His run at the Office of Management and Budget during President Ronald Reagan's first term is probably more valuable -- in terms of preparation for the job -- than spending years in graduate school.

The key question is about the previous 20 years of his career. Did all the time as a TV pundit leave him ill-prepared for anything other than, well, punditry? The skills that help on TV -- manufacturing strong opinions and having great confidence in them -- are almost the exact opposite of the honest broker role.

President Woodrow Wilson had a weakness for believing he had a mystical bond with the American people that allowed him to determine the right answers (because Democracy is Good or some other nonsense). So has pretty much every president since. In reality, presidents usually owe their policy successes to their supreme access to information, their interest in the art of collecting and processing the policy clues contained in all that information, and their political skills to help push their preferences through the government. The job of presidential staff, and especially the NEC director and national security adviser, is to supplement the president's skills in those specialized areas.

Trump, of course, misses all of that. No president has more fully invested himself in Wilsonian mysticism and the notion that he should therefore follow his instincts. The more the president surrounds himself with TV pundits, the more he needs honest brokers who can find ways of breaking through his bravado without letting on that they're actually feeding him useful information and analysis.

Perhaps Kudlow can do that. But even if he once had those skills, it's likely that everything he's learned in cable news makes him dramatically unfit for this particular White House role. Past presidents created and embraced teams like the NEC to avoid making the kinds of policy mistakes that ruin presidencies. The current one is too busy obsessing about the next news cycle to even begin to understand the danger to himself and the nation of casting those lessons aside.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Jonathan Bernstein is a Bloomberg View columnist. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.

To contact the author of this story: Jonathan Bernstein at jbernstein62@bloomberg.net.

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